iPhone XR didn't sell out overnight, but demand is still stronger than last year's iPhone 8

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• The lower-cost Apple iPhone XR didn't sell out preorders the first day it went on sale.
• But that doesn't mean there isn't a lot of demand for the iPhone XR.
• Reliable TF International Securities analyst Ming-Chi Kuo said that demand for Apple's new colorful iPhone is outpacing last year's iPhone 8 cycle.

Just because Apple's new iPhone XR didn't sell out preorders doesn't mean that there isn't a lot of demand for it, reliable Apple analyst Ming-Chi Kuo writes in a new TF International Securities note distributed on Monday.

In fact, demand for Apple's least expensive new phone is outpacing the demand for the iPhone 8 during the last cycle, he writes in a note seen by Business Insider.

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"We are not surprised that XR's initial delivery times are shorter than those of the iPhone XS series after pre-order open given that XS and XR have different target customers. The former's target customers are Apple fans, who snap up new models rapidly after the pre-order open," Kuo wrote.

Compare that to people who might want to buy the less expensive iPhone XR, which starts at $750 in the United States compared to the iPhone XS at $1,000. iPhone XR buyers "are general users who are used to operating iOS with characteristics including favoring the Apple brand, limited budget or no urgent replacement demand," Kuo continued.

Kuo believes that if there is no shortage of supplies on the iPhone XR, then Apple's own website shipment dates aren't as useful for predicting demand. iPhone XR buyers are also more likely to buy from retailers or mobile carriers, not Apple directly.

"In terms of pre-order preferences, demand for new colors is better than expected, and more buyers prefer 64GB," which is the entry-level model, Kuo writes.

Kuo still believes that in the long run, iPhone XR will outsell the iPhone XS and iPhone XS Max, illustrated by this chart:

TF International Securities